Analysts: FCC likely won't strip News Corp.

As the News Corp. hacking scandal continues to widen, the odds of the FCC moving to strip media giant of its American broadcast licenses are slim — but not nil —several telecom analysts concluded Monday.

Industry observers have been scrambling to assess how much collateral damage may ensue from the British episode that has already resulted in the closing of News of the World and the downfall of two top News Corp. executives.

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But the analysts maintain that unless investigations reveal possibly illegal conduct in the U.S., Murdoch will remain out of reach for the commission.

“If alleged bribery and phone tapping are confined to the U.K., we believe the likelihood of U.S. broadcast licenses being revoked or not renewed is very low,” telecommunications analysts Rebecca Arbogast and David Kaut of the investment firm Stifel Nicolaus wrote in a note to clients Monday.

MF Global industry analyst Paul Gallant came to a similar conclusion.

“Based on our preliminary assessment of the law and the politics around News Corp. situation, we think the chances of the FCC stripping News Corp. of its U.S. broadcast TV licenses are relatively low,” Gallant wrote in a note also distributed Monday.

Still, the negative ramifications for the American arm of Murdoch’s media empire could amplify based on what an FBI investigation uncovers, the analysts said.

“It would be a grave problem if the company is found in the United States to have committed a massive coverup of misconduct or questionable links with law enforcement and politicians that is emerging in the U.K.,” Arbogast and Kaut wrote.

One possibility, Gallant suggests, is that News Corp. voluntarily sells off its licenses. If an investigation results in convictions through the American legal system, News Corp. may prefer to sell its licenses than risk not having them be renewed.

Thus far, FCC commissioners have indicated that there isn’t just cause for the agency to investigate whether News Corp. is still fit to hold its licenses.

If the commission did act, its authority would come from a provision in the Communications Act that stipulates vague character requirements for spectrum license holders.

This article first appeared on POLITICO Pro at 5:43 a.m. on July 19, 2011.

Of course they are not going to lose their license, for what? News of the world was a British gossip rag that accounted for less than 1% of news corps hundreds of media holdings, that are all independently run.

Fox news and the rest of the American run companies did nothing wrong.

The FCC is probably not willing to test that authority which has the thinnest veneer of constitutional authority with which to begin. If NewsCorp violated FCC regulations anywhere in the U.S., they will pay. But otherwise, the courts will see such a move for what it would be: politics by other means.

It now seems likely there were indeed violations of the American FCPA, which still holds sway even if bribery and corruption with foreign officials by Americans happen abroad. If American executives of this company are indeed found guilty of such violations, that in itself would be grounds for yanking their licenses. And that is as it should be!

Of course they won't. Like every other regulatory agency, the FCC is a powerless group that only answers to the companies they regulate. It should not be a partisan issue and News Corp is only part of the problem; all media companies that have gotten too big and control too many outlets should be broken up.

To me it looks like the Obama-controled FCC is making another backdoor move to silence Fox News. There have been no claims that I know of that indicate in any way that the US News Corp properties have engaged in any of the hacking, etc. that have infected their UK properties. Based on past performance I believe that the FCC is using this UK problem in their constant and unsuccessful attempts to silence or close Fox News because it is trouncing all their liberal competitors that dominate the news gathering and discemination in the US. It's just another slimy move by Obama and his cronies and destined to fail.